Baker Market Update: July 17, 2017

At the risk of oversimplification, a risk too often avoided, Janet Yellen’s two-day Congressional testimony could be succinctly paraphrased by a single statement; “I’m not sure.” Not sure when inflation will kick in, but sure that it will. Not sure when wages will rise, but sure that they will, too. Not sure when the next rate hike will happen, but it will happen. Well, pretty sure it will happen, just not sure when. Her uncertainty is certainly understandable. Traditional relationships among interest rates, growth, unemployment, inflation, and incomes are all out of whack. Some might say downright wacky, not unlike the nation’s fiscal policy. But that’s another story for another day.

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